As the market rallies day after day, and valuations in the leading stocks begin to look stretched, picking up companies with discount valuations can ease the nerves. Investors who buy stocks trading below historic valuations enjoy a certain confidence that growth investors often have to swallow.
Even better if you can find stocks that have secure business models, top Zacks Ranks, and strong earnings growth forecasts.
Perion Networks
Perion Networks PERI operates a global advertising technology (adtech) platform that connects advertisers with publishers and consumers. They specialize in helping advertisers reach targeted audiences through various channels, including display advertising, video advertising, and search advertising. PERI recently gained recognition for its growth in the connected TV (CTV) advertising space, which is a rapidly developing sector within the adtech industry.
Perion Networks landed on the Zacks Rank #1 (Strong Buy) list just this morning after analysts upgraded this year’s earnings estimates. FY24 earnings estimates were revised higher by 1.2%.
Additionally, sales for this year are forecast to grow 17% YoY and next year by 10%.
PERI is currently trading at a one year forward earnings multiple of 7.5x, which is well below its 10-year median valuation of 11.2x. But that isn’t the only valuation method identifying a discount, the PEG Ratio, which includes earnings growth forecasts, also indicates a potential opportunity.
Perion Network’s EPS are forecast to grow at an incredible 22% annually over the next 3-5 years, giving it a PEG ratio of just 0.34, which would imply a deeply discounted valuation.
Honda Motor Company
Since EVs have been garnering all the hype and buying over the last few years, traditional auto manufacturer stocks seem to have fallen out of favor. But for discerning investors this is creating a juicy opportunity.
Now that EV sales growth has begun to slow in the US, and hybrid car options have again gained popularity Honda Motor Company HMC may be an exceptional opportunity. Just take a look at how HMC has outperformed Tesla TSLA over the last nine months.
Furthermore, Honda Motor Company has a Zacks Rank #1 (Strong Buy) rating, indicating upward trending earnings revisions. Earnings estimates have been upgraded across timeframes, and sales are expected to expand 14% this year.
Honda Motor Company is trading at a one year forward earnings multiple of 8.5x, which is below its 10-year median valuation of 9.1x. Although this isn’t a deep historical discount, HMC also has a PEG ratio that would indicate a deep value opportunity.
With EPS growth forecast of 20.8% annually over the next 3-5 years, HMC has a PEG ratio of 0.4.
KKR & Co.
Over the last four months, private equity giant KKR & Co. KKR has been on an absolute tear, crushing the returns of the already strong broader market. Thanks to its private credit business, which has exploded in the last year thanks to banks that are hesitant to make loans, investors have piled into the stock.
And it doesn’t look like the rally will end any time soon.
KKR & Co. has a Zacks Rank #1 (Strong Buy) rating as analysts have nearly unanimously revised earnings estimates higher across timeframes. KKR is also expected to grow its top line by 18% this year and 15% next year.
Admittedly, KKR & Co. is not trading at a historical discount as its one year forward earnings multiple of 21.2x is above its 10-year median valuation of 14.4x. But with business and profits expanding at an impressive rate, KKR too enjoys a favorable PEG ratio.
With EPS growth forecasts of 27.2% annually over the next 3-5 years, KKR has a PEG ratio of 0.78.
Bottom Line
For investors prioritizing value over growth, these three stocks warrant consideration for inclusion in their portfolios, offering the potential for stable returns and long-term appreciation.
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As the market rallies day after day, and valuations in the leading stocks begin to look stretched, picking up companies with discount valuations can ease the nerves. Investors who buy stocks trading below historic valuations enjoy a certain confidence that growth investors often have to swallow.
Even better if you can find stocks that have secure business models, top Zacks Ranks, and strong earnings growth forecasts.
Perion Networks
Perion Networks PERI operates a global advertising technology (adtech) platform that connects advertisers with publishers and consumers. They specialize in helping advertisers reach targeted audiences through various channels, including display advertising, video advertising, and search advertising. PERI recently gained recognition for its growth in the connected TV (CTV) advertising space, which is a rapidly developing sector within the adtech industry.
Perion Networks landed on the Zacks Rank #1 (Strong Buy) list just this morning after analysts upgraded this year’s earnings estimates. FY24 earnings estimates were revised higher by 1.2%.
Additionally, sales for this year are forecast to grow 17% YoY and next year by 10%.
PERI is currently trading at a one year forward earnings multiple of 7.5x, which is well below its 10-year median valuation of 11.2x. But that isn’t the only valuation method identifying a discount, the PEG Ratio, which includes earnings growth forecasts, also indicates a potential opportunity.
Perion Network’s EPS are forecast to grow at an incredible 22% annually over the next 3-5 years, giving it a PEG ratio of just 0.34, which would imply a deeply discounted valuation.
Honda Motor Company
Since EVs have been garnering all the hype and buying over the last few years, traditional auto manufacturer stocks seem to have fallen out of favor. But for discerning investors this is creating a juicy opportunity.
Now that EV sales growth has begun to slow in the US, and hybrid car options have again gained popularity Honda Motor Company HMC may be an exceptional opportunity. Just take a look at how HMC has outperformed Tesla TSLA over the last nine months.
Furthermore, Honda Motor Company has a Zacks Rank #1 (Strong Buy) rating, indicating upward trending earnings revisions. Earnings estimates have been upgraded across timeframes, and sales are expected to expand 14% this year.
Honda Motor Company is trading at a one year forward earnings multiple of 8.5x, which is below its 10-year median valuation of 9.1x. Although this isn’t a deep historical discount, HMC also has a PEG ratio that would indicate a deep value opportunity.
With EPS growth forecast of 20.8% annually over the next 3-5 years, HMC has a PEG ratio of 0.4.
KKR & Co.
Over the last four months, private equity giant KKR & Co. KKR has been on an absolute tear, crushing the returns of the already strong broader market. Thanks to its private credit business, which has exploded in the last year thanks to banks that are hesitant to make loans, investors have piled into the stock.
And it doesn’t look like the rally will end any time soon.
KKR & Co. has a Zacks Rank #1 (Strong Buy) rating as analysts have nearly unanimously revised earnings estimates higher across timeframes. KKR is also expected to grow its top line by 18% this year and 15% next year.
Admittedly, KKR & Co. is not trading at a historical discount as its one year forward earnings multiple of 21.2x is above its 10-year median valuation of 14.4x. But with business and profits expanding at an impressive rate, KKR too enjoys a favorable PEG ratio.
With EPS growth forecasts of 27.2% annually over the next 3-5 years, KKR has a PEG ratio of 0.78.
Bottom Line
For investors prioritizing value over growth, these three stocks warrant consideration for inclusion in their portfolios, offering the potential for stable returns and long-term appreciation.
Just Released: Zacks Top 10 Stocks for 2024
Hurry – you can still get in early on our 10 top tickers for 2024. Hand-picked by Zacks Director of Research, Sheraz Mian, this portfolio has been stunningly and consistently successful. From inception in 2012 through November, 2023, the Zacks Top 10 Stocks gained +974.1%, nearly TRIPLING the S&P 500’s +340.1%. Sheraz has combed through 4,400 companies covered by the Zacks Rank and handpicked the best 10 to buy and hold in 2024. You can still be among the first to see these just-released stocks with enormous potential.
See New Top 10 Stocks >>
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